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Flashcards in Chapter 10 Deck (19):
1

Operational assets that lack physical substance

Intangible Assets

2

The cost of parking lots, driveways, and private roads and the costs of fences and lawn and garden sprinkler systems

Land Improvements

3

The amounts paid to acquire the rights to explore for undiscovered natural resources or to extract proven natural resources

Acquisition Costs

4

For natural resources, expenditures such as drilling a well, or excavating a mine, or any other costs of searching for natural resources

Exploration Costs

5

For natural resources, costs incurred after the resource has been discovered but before production begins

Development Costs

6

Costs to restore land or any other property to its original condition after extraction of the natural resources ends

Restoration Costs

7

Obligations associated with the disposition of an operational asset

Asset Retirement Obligations (AROs)

8

Adjusts the cash flows, not the discount rate, for the uncertainty or risk of those cash flows

Expected Cash Flows Approach

9

The increase in as assets retirement obligation that accrues as an operating expense

Accretion Expense

10

Exclusive right to manufacture a product or use a process

Patent

11

Exclusive right of protection given to a creator of a published work

Copyright

12

Exclusive right to display a word, slogan, symbol, or emblem that distinctively identifies a company, product, or service

Trademark

13

The process of evaluating the purchase of operational assets

Capital Budgeting

14

For interest capitalization, rates from specific construction loans to the extent of specific borrowings are used before using the average rate of other debt

Specific Interest Method

15

For interest capital, weighted- average rate of all interest-bearing debt, including all construction loans

Weighted-average Interest Method

16

One-time costs that incur when a company introduces a new product or service, or commences business in a new area or with a new costumer

Start-up Costs

17

Established when a company as completed all planning, designing, coding, and testing activities that are necessary to establish that the product can be produced to meet its design specifications

Technological Feasibility

18

Requires that explorations costs that are known not have resulted in the discovery or oil or gas can be included as expense in the period the expenditures are made

Successful Efforts Method

19

Allows costs incurred in searching for oil and gas within a large geographical area to be capitalized as assets and expensed in the future when successful wells are found

Full-cost Method